The Briefing on Friday 24th August 2018
In this edition of The Briefing from Informed Choice on Friday 24th August 2018 – saving leads to happiness, avoiding a no-deal scenario, AE not the answer for self-employed, TSB departures, and Sainsbury’s-Asda merger probe.
Saving leads to happiness
The latest Lloyds Bank Quarterly Savings Report shows the overlap between savvy saving and personal wellbeing, with regular savers feeling happier and less anxious than their non-saving counterparts. Almost half of people say that money matters are their biggest cause of stress. Younger age groups particularly feel this way, with 58% of 25 to 34 years olds stating this. Almost three in five 35 to 44 year olds also claim to be anxious and worried about their personal finances. Despite this, it is clear that saving regularly can have a positive impact on finances and people’s happiness. Almost three quarters of regular savers felt happy over the month prior to being asked, as opposed to just over a third of non-savers.
Mark Rawcliffe, Head of Savings, Lloyds Bank said:
Getting into the savings habit can not only help your finances, but it can also ease financial worries and reduce stress for many. Having savings provides peace of mind that there is a financial buffer for any unexpected costs arising or reassurance of the ability to pay for something if you are saving up for a longer term goal. Putting a small amount away each month in a regular savings account is often a good first step on the path to building your savings pot.
Avoiding a no-deal scenario
UK Finance has responded to the government’s notification on financial services in the event of a ‘no deal’ Brexit scenario. Commenting, Stephen Jones, Chief Executive of UK Finance, said:
A ‘no deal’ scenario can and should be avoided. Both the UK and our EU partners should focus on agreeing a managed exit and a clear framework for cross-border trade including in financial services.
However, it is right that contingency plans are made to minimise disruption for consumers and businesses on both sides of the Channel in the event of a ‘no deal’.
The government is taking a pragmatic approach to addressing critical cliff-edge issues and to ensure consumers and businesses can continue accessing vital cross-border services.
However, these issues cannot be addressed by the UK acting alone. It is therefore vital that negotiators on both sides work together to agree solutions that prevent any unnecessary disruption and additional costs for customers in both the EU and UK.
AE not the answer for self-employed
The Association of Independent professionals and the Self-Employed has responded to new research from Prudential which shows that there is a pensions crisis among the UK’s self-employed. The research – which supports many of the worrying findings from IPSE’s recent ‘How to solve the self-employed pensions crisis’ report – paints a concerning picture about the lack of self-employed people actively saving for later life.
Simon McVicker, IPSE’s Director of Policy, said:
The sheer volume of self-employed people failing to save for later life is, indeed, an extreme concern, but now there is a real opportunity for both government and the pensions industry to avert this crisis.
Auto Enrolment (AE) is not the answer, however. While the policy has been a success in boosting the number of employees paying into a pension, IPSE’s research found that it simply isn’t a viable solution for the self-employed. There is no employer to enrol them and it also reduces their ability to be flexible and in control of their money – two of the central attractions of self-employment.
Instead, we support rolling out a sidecar pension scheme, allowing the self-employed to save for later life and also into a separate ‘rainy day’ fund for emergencies.
Self-employment is a positive and rewarding career for many millions of individuals and adds significant value to the UK economy every year. However, it is import that we put into place measures that protect those who are unable to save for later life, and thus alleviate the already dangerous over-reliance on the state pension.
Women, Millennials and those new to self-employment face a particularly bleak future and the worrying prospect of pensioner poverty if the crisis isn’t averted. Both industry and policy makers now have the opportunity to develop feasible and forward-thinking solutions to give long-term peace of mind to the burgeoning self-employed workforce.
Three senior executives at TSB Bank are leaving the business in a restructuring its Spanish owners claim is unrelated to the recent IT systems chaos. Treasurer Ian Firth, Chief Marketing Officer Nigel Gilbert and Human Resources Director Rachel Lock will all retire in the coming months, with two of the roles replaced by internal appointments. No replacement has yet been found for the Human Resources Director role. Earlier this year, TSB experienced an IT systems meltdown during the transition of computer systems, affecting thousands of customers who could not access online banking services.
Sainsbury’s-Asda merger probe
The Competition and Markets Authority has launched an investigation into the proposed Sainsbury’s-Asda merger. It will examine whether the merger could result in less consumer choice, higher prices or worse customer service. If the merger is completed, it will result in the largest retail chain in the UK, with 2,800 stores and 31.4% of the British grocery market. As part of the investigation, the CMA will also consider whether the new firm could squeeze suppliers due to its size.
CMA chief executive Andrea Coscelli, said:
About £190bn is spent each year on food and groceries in the UK so it’s vital to find out if the millions of people who shop in supermarkets could lose out as a result of this deal.
We will carry out a thorough investigation to find out if this merger could lead to higher prices or a worse quality of service for shoppers and will not allow it to go ahead unless any concerns we find are fully dealt with.
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